India Diversifies Energy Supplies Amid West Asia Disruptions

India's energy trade has taken a significant shift as the country increases its purchases of liquefied petroleum gas (LPG) and liquefied natural gas (LNG) from the United States due to disruptions in West Asia. According to data from maritime intelligence firm Kpler, India imported about 0.62 million tonnes of LPG from the US in August, accounting for more than 73% of its total LPG imports.

This surge in LPG imports from the US has been a response to the effective closure of the Strait of Hormuz following the outbreak of war between Iran and the US. The waterway is a key shipping route for crude oil and gas exported by Gulf producers to major consumers, including India. As a result, UAE LPG imports fell to about 140,000 tonnes in August, while Qatar supplied around 60,000 tonnes.

The shift has also been visible in LNG imports, although India's sourcing pattern has been more diversified. LNG imports from Qatar, India's largest source of the fuel, fell to zero in April, while US supplies rose to about 0.75 million tonnes in August from 0.72 million tonnes in July.

Sumit Ritolia, senior manager at Kpler, noted that the shift towards the US has been driven by constrained Middle Eastern availability and the need for Indian buyers to diversify and secure replacement cargoes. However, he also cautioned that energy trade flows do not adjust immediately to geopolitical developments due to contractual commitments, cargoes already in transit, and procurement lead times.